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Kim Moo-sung said he would step down to take responsibility for the defeat

South Korea's ruling party leader has offered to resign after the party lost its majority in elections on Wednesday.

With most of the votes counted, the centre-right Saenuri party took just 122 seats in the 300-seat National Assembly.

The opposition Minjoo party won 123 seats in a surprise victory.

This vote was seen as a crucial test for President Park Geun-hye ahead of presidential elections next year.

Kim Moo-sung said he would resign as party leader "to take responsibility for the resounding defeat in the general elections", according to Yonhap news agency. The loss signals the first time in 16 years the conservative party won't have control of parliament.

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The result dents President Park Geun-hye's prospects of seeing her party retain the presidency next year

The Minjoo party said in a statement to local media that the "voters delivered stern judgment on botched economic policies" of the Park government.

Ms Park has been criticised over her handling of the economy, which has seen rising unemployment falling exports and high levels of household debt.

Firstly, attempts by the government to weaken the legal protection workers have against being sacked. President Park's government had been pushing for this as the economy weakened and, she felt, became less competitive.

Secondly, unhappiness at what opponents of the government see as a heavier hand against dissidents and protesters. A left-wing opposition party was banned and its leaders arrested for their alleged sympathies with North Korea.

Household debt is high and rising in South Korea and unemployment among young people is at levels not seen for nearly two decades. These economic concerns seem to have dominated the election. North Korea was not a major issue.

Polls ahead of the election suggested Ms Park's party was on course to secure a substantial majority of seats.

But as the results started coming in, the success of the main opposition Minjoo Party became clear.

Other opposition parties also did well - the People's Party winning 38 seats and the Justice Party taking six.

"The Saenuri Party humbly accepts the election results and voters' choice," said spokesman Ahn Hyung-Hwan.

"The people are deeply disappointed with us, but we've failed to read their mind."

Voters cast ballots at nearly 14,000 polling stations to elect 253 of the 300 lawmakers. The remaining 47 proportional representation seats are allocated to parties according to the numbers of votes they receive overall.